TORONTO – Gerry McCarvill has Brazilian gold in his past. And Canadian iron ore. And profitable sales of resource companies.
Now he has a Toronto merchant bank.
Mr. McCarvill, looking lean and fit at age 65, also has stories. About Pat Sheridan, a Korean War fighter pilot who used to bunk in military barracks during his capital-raising trips to London. “Ran into him at the Four Seasons, where I was staying, and asked him if he might like to have a decent dinner somewhere. ‘Sure, how about right here?’ he flipped back.
Mr. McCarvill and Patrick Sheridan are Canadian captains of industry. If they were placer nuggets, they’d knock along as heavy rough-hewn rocks that nature tried and failed to smooth and shine. If they were deposits, they’d probably be banded iron formations in Labrador. Or copper-gold shear zones in a Guyana jungle or on a Colombian mountainside.
A vanishing breed, these guys are the resource veterans you rarely view during this age of electronic wealth. They are prone to Rolls-Royces. Or riding in limousines across desert plains and on dusty mountain trails.
Allow me to populate the landscape first with Mr. Sheridan, a Vancouverite who spent decades building mining companies, chief among them the Thunder Bay, Ontario, predecessor to North American Palladium (TSX: T.PDL, Stock Forum) and its now $4 million-plus yearly royalties to his bank account. “Pat’s a fighter, his own lawyer, who’s sued everyone and won,” recalls Advanced Explorations (TSX: V.AXI, Stock Forum) CEO and geologist John Gingerich.
Mr. Gingerich worked as a young Ontario consultant for Mr. Sheridan, staking claims for a palladium pipe, then left for a full-time spot at Noranda. “The Noranda guys would half-joke, ‘Jesus we don’t want to find anything out there, Pat will just sue us for it and win.’ ”
This article is about Mr. McCarvill, chairman of a new Toronto merchant bank called Norvista Resources. He calls himself “a street fighter,” a graduate of “the school of hard knocks” and “a mine builder.” (If you want to read about Pat Sheridan, see Peter Kennedy’s nice profile.)
“I built Desert Sun Mining and sold it to Yamana (NYSE: AUY, Stock Forum),” says Gerry McCarvill, speaking to me inside a 15th-floor King Street office shuttered in mauve. “That was $700 million. Same with Consolidated Thompson, started with $2 million and sold it for more than $4 billion.”
Norvista is building what Mr. McCarvill sees as five eventual mines, mostly gold, silver and copper. They’re in Mexico, Colombia and Val d’Or in Quebec. They are a lot of vistas: Highvista, which is private for now and in Mexico; Calvista (TSX: T.CVZ, Stock Forum) and Solvista (TSX: V.SVV, Stock Forum), which are public and in Colombia. Aurvista, which is along the Abitibi Gold Belt in Quebec.
Yet another vista is said to be a base metals project in Latin America. Mr. McCarvill and his team say they are not ready to discuss anything happening on that end. I just hope, to keep this all as rock-solid clear as a breccia pipe, that yet another Norvista company does not have vista tagged to its name.
Still, the goal is the same for all of these new-cos: “Gerry decided the merchant bank approach was best for all of ‘em,” says David Meyer, a former Bay Street analyst who is a managing director of Norvista and active at Calvista’s exploration projects in Bucaramanga, Colombia. “We raise money, $35 million in the case of Calvista and Solvista, and we dividend out the companies to our private shareholders,” says Mr. Meyer, 49. “Most of our network of shareholders did spectacularly well with Gerry at Consolidated.”
Mr. Meyer was speaking to me in Medellin two weeks ago. We were lunching at a pizza place just outside the Hotel Fernando. With us was another member of the Norvista coven, Miller O’Prey, a 34-year-old rough-and-ready economic geologist from Belfast, Ireland. Mr. Meyer and Mr. McCarvill plucked O’Prey from Grupo de Bullet’s vast Colombia operations and anointed as CEO of Solvista. (Please see previous coverage of Mr. Miller, Solvista and Colombia.)
The talent pool is a theme Gerry McCarvill returns to, as we head (this past week) to Canoe, a rehabilitated artisanal restaurant atop Toronto’s TD Tower. Talk about vistas up there; there are plenty.
Mr. O’Prey, for example, was the lad and qualified person on Ventana’s NI 43-101 report in Colombia. “A smart kid from Ireland who doesn’t drink but can cuss with the best of them,” says Mr. McCarvill. Norvista, after acquiring properties from Robert W. Allen’s Grupo de Bullet, scooped up Mr. O’Prey, a Medellin resident and fluent Spanish speaker.
“Bullet was our jockey on that one,” Mr. McCarville says about Bob Allen, probably the largest stakeholder of mineral deposits and prospects in Colombia. “Bullet, well, he had all the best assets down there, and a lot of the talent.”
“It’s in our interests to see Miller take Solvista most of the way to a mine, at Caramanta and Guadalupe,” Mr. Allen says about Solvista’s Antioquia area properties.
In Toronto this week, Mr. McCarvill appears to have chosen his coven with care. One or two of them even share his passion for purple. (Photo above: Ruben Shiffman at left, Paul Crath, Gerry McCarvill and Rick Adams, left to right – Thom Calandra photo)
Norvista’s Highvista Gold Corp. is exploring about 30 historic gold workings at Canasta Dorada in the Sonora Belt, just next to AuRico Gold’s (TSX: T.AUQ , Stock Forum ), formerly Gammon Gold’s, 1.5-million-ounce El Chanate Mine. That’s a couple hours’ drive from Tucson, Arizona, where I went to graduate school. Parent Norvista Resources owns 38 percent of Highvista.
The 43-year-old fellow running Highvista is Rick Adams. Mr. Adams, a mining engineer, started and sold Castle Gold to Argonaut Gold (TSX: T.AR, Stock Forum) for $110 million in 2009. “That was a pretty good return for three years’ work,” says Mr. Adams, who also has a master’s degree in business administration. “But with this team, and the bank behind us, I think we’ll do even better.”
We’ll see. Highvista likely will go public through a cash-pool corporation and reverse takeover of a shell by early 2012. Norvista has plans to go public as soon as this year.
Paul Crath, the merchant bank’s legal counsel and a managing director, says Norvista Resources has 120 original shareholders. They keep their stock in the parent company in escrow.
“Everyone pays the same for their stock, our shareholders and us,” says Mr. McCarvill. “There is no cheap seed stock.”
These miners ain’t never flown before
In coming months, as Norvista negotiates and expands its vistas, the parent merchant bank as it heads toward a public offering will act more like a private-equity shop and likely hold greater than 10 percent stakes in each company.
In the meantime, as Mexico and Toronto-educated Dr. Ruben Shiffman tells me, the group is spending a lot of time ensuring that its holdings never enter the kind of title and deed disputes that one sees all too often in Mexico, or Colombia, or Peru. Dr. Shiffman is vice chairman of Calvista and with David Meyer and others, he helped negotiate what looks like an innovative ownership structure at Calvista in Bucaramanga.
Some 200 artisanal miners became part of the Baja California Miners Association and received 30 percent of Calvista, pre-IPO. “They have never flown in a plane before, some of these Colombian miners,” says Dr. Shiffman. “Now they have board seats on a public company and we have full title.” Adds Rick Adams, “That’s important under a Napoleonic system of arbitration and settlements.”
As for Gerry McCarvill, he gets around, I last saw him taking in vistas of the lake and the city of Toronto from our lunch spot, Canoe. G.M. also has a fishing lodge up at the Flower River near Labrador. Nice views there, too. (Photo above: A pike hangs on the wall of another lodge I was at this past week, Laurie Lake Lodge in Manitoba)
I own shares of Solvista, having stated my intention to purchase the stock in an article two weeks ago. In this report, I own none of the other companies cited.
NOTES: A wad of Colombia prospectors have now released fresh resource statements or drill assays. They include Sunward Resources (TSX: V.SWD, Stock Forum) and Continental Gold (TSX: T.CNL, Stock Forum), both of them with results that exceeded their whisper numbers. In the case of Sunward at Titiribi, Dr. Amit Tripathi sends me the prospector’s newest website additions in terms of mapping and technical reporting. It is right here. I think it is yet another example of VP of Exploration Dr. Tripathi’s relentless attention to detail.
In the case of Continental Gold, what can I say except that I expect massively positive gold and silver grades from a deep-drilling program to follow Continental’s now-public resource statement. At some point, we all shall learn more about plans to build an environmentally sound tunnel from the Buritica underground mine to a plant site across the valley. Grupo de Bullet’s Bob Allen, who is chairman of Continental, along with CEO Ari Sussman in Toronto and VP of Exploration Stuart Moller, with chief geologist Mauricio Castaneda, deserve credit for putting Continental well on the road to becoming a $5 billion or greater company in the next three years.
The Cambridge House’s Toronto conference Thursday and Friday brought more than 1,000 people to the Sheraton hotel. Joe Martin’s show offered four or five excellent fresh ideas. … I will be speaking and eating suckling pig at Brien Lundin’s New Orleans Investment Conference in late October. You can click on this link to get a deep discount on the entrance fee. … I am a partner of Torrey Hills Capital, which is in Del Mar, near San Diego. That investor outreach firm lists AXI but none of the rest of the companies in this report as clients.
Stockhouse members – the service is free – can see my entire portfolio online. It is under the portfolio function and my user name, which is TCALANDRA. There is nothing in my portfolio suitable for risk-averse investors. I am not a financial adviser. Owning any of these securities could result in your participation in the crying game. Please see my comments on Stockhouse about the benefits of holding securities and physical metals for long spans of time.
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